Fiscal time bomb ‘not a reality’

Pietermaritzburg - The DA’s claim that the province is sitting on a “financial time bomb” has been rubbished by the KZN Treasury.

In a statement yesterday, the DA MPL Francois Rodgers said the Provincial Treasury’s 2015/16 mid-year budget performance, discussed at the KZN Legislature on Friday, revealed the province was facing a “mammoth anticipated overspend of R883 million on its budget”.

But Treasury spokesperson Ntokozo Maphisa said there is “no financial time bomb” and that rather the provincial overspend Rodgers is referring to is a “mid-year projection, not a reality”, which can be “contained”.

Rodgers said “this precarious situation could have dire consequences on essential service delivery” as departments scramble to cut costs to reduce their “massive predicted over-expenditure”.

“Any cuts on departmental base line budgets will have a detrimental effect on service delivery.

“The leading culprit behind this fiscal time bomb is KZN’s Health Department, which is predicted to overspend by R802 million,” said Rodgers.

He said this is followed by the departments of Social Development, Co-operative Governance and Public Works.

He said not only does this represent complete “apathy and massive inefficiency”, but that it “also highlights the massive disparity” that exists between Treasury and certain departments.

“KZN now stands on the edge of a fiscal cliff and it is going to demand exceptional and strong leadership to bring the province back from the brink of disaster,” said Rodgers.

Maphisa, while admitting that the Health Department was “in the same situation last year”, said they will “impose a cost containment plan” approved and closely monitored by Treasury.

“There is absolutely no disparity between Treasury and departments. Spending is monitored … monthly. We do not sit idly by when departments overspend.”

He said his department “has dedicated budget analysts for each department”.

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